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A piece in the London Sunday Times re Long Term Capital Management
suggested that although capitalised at 3.4billion, this hedge fund ran
positions up to 400billion. The fed have launched their lifeboat to protect
the banks who have exposure to their losses, including in Europe UBS and
Paribas. To me this seems one hell of a gearing, over 100 to 1 or a margin
of less than 1%. Q1. What margin percentage do you futures or commodity
traders in the States typically work on? Q2. How can the fed justify
this? What does this look like to the Japanese or Indonesians, who the
IMF and G7 have been preaching to about the dodgy loans their banks carry?
Q3 Why were they not using proper trailing stops?
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